Friday, June 14, 2013

Personally, I am sick of the adversarial relationship between politicians and the health insurance industry. Everyone is promoting their own agendas. The insurance companies keep raising rates in order to make profits, and the insurance commissioner of California continues to make ludicrous politically motivated comments about the big bad health insurance companies. Would it not make sense for a coalition of these people to sit at the same table and figure out a way to offer affordable health insurance to this country instead of creating questionable programs that may continue to drive rates higher? The people I work with and talk to want one thing, and that's for their health insurance rates to be more affordable.

Instead of striving to reach this objective, everyone is playing a game of one-upmanship, and the consumer winds up getting shafted. The biggest challenge for the near future is separating truth from fiction, as we are about to be bombarded with a multi million dollar advertising program from the State of California regarding the new Covered CA health insurance exchange. Whether it's me or someone else, please consider working with a knowledgeable person who can help you sift through this new health insurance maze.

Thursday, June 6, 2013

by: Bruce Shutan

June 6, 2013

A 40-year-old Californian reportedly would pay anywhere
from about $40 to $300 per month for a mid-level health plan in the state’s HIX,
depending on the individual’s income. But there’s more to the story than these
modest numbers reveal.

Anthony Wright, executive director of the advocacy group Health Access,
recently told Reuters that the premium projections represent “a revolutionary
improvement to move from a broken market where people are charged by how sick
they are, to a competitive market where people pay what they can afford, based
on a percentage of their income, on a sliding scale.”

Not exactly, according to California Republican Assemblyman Dan Logue, who
compared the rates to “a shell game” and predicted that a tax hike would be
needed to fund subsidies, which would trigger higher prices at the gas pump,
grocery store and other venues.

Thirteen of the more than 30 health insurers that had applied to participate
in the California Health Benefit Exchange will offer coverage in the HIX. Peter
Lee, the exchange’s executive director, has noted that residents can expect to
pay up to 29% less than current rates for small businesses.

The public exchange rates being reported in California and some other states
across the U.S. do not necessarily reflect what individuals may pay once their
age, location, smoking status and income are all factored into the mix, cautions
Robert Zirkelbach, a spokesman for America’s Health Insurance Plans. Another
consideration is the regulatory environment that’s in place in each of these
states.

“Many people are going to be required to purchase coverage that’s much more
comprehensive, but also more expensive than what they’re purchasing today,” he
says. A recent Milliman report estimated that premiums could climb an average of
30% next year for many of the roughly 1.3 million middle- or higher-income
Californians with individual-market coverage.

Conspicuously absent from the recent announced rates in California is how
they compare to what people are paying today, which Zirkelbach says could vary
significantly from one individual to the next. Some young people, however, are
expected pay nothing at all, depending on their earnings, while others will
qualify for subsidies to help finance their coverage.

One bright spot is that market forces are already shaping the HIX model.
“We’re seeing plans offer a variety of innovative benefit packages in a lot of
these exchanges, including a high-value provider network, as well as programs
that promote prevention and wellness, and coordinate care for patients with
complex medical conditions,” Zirkelbach observes. The underlining goals are to
improve care, while also making coverage more affordable, he adds.

Concern has been voiced about a lack of HIX competition in some states, such
as Alabama and Alaska, where certain health insurance carriers dominate those
markets. But Zirkelbach explains that “just because one health plan has large
market share doesn’t mean there’s not competition in the marketplace or there
are not choices for consumers.”

He points to a variety of coverage options from different health plans as
well as multiple policies being available within any given carrier – information
that’s easily accessible at www.healthcare.gov and categorized by Zip code.

Virtually all Americans will be required to have
health insurance under the Affordable Care Act starting in 2014, and President
Barack Obama especially wants young, healthy people to sign up.
About two-thirds of the uninsured are younger than 40. They use fewer health
services, and their premiums are needed to help keep insurance costs down for
everyone else. Yet the incentive structures in the law work at cross-purposes with this goal
and could well undermine its success. It will all come down to costs. Four out of 5 people younger than 30 will face higher premiums than without
the Affordable Care Act even with the subsidies many can receive.

The law requires young people to pay more for their health coverage so older
people can pay less. A study published this year by the American Academy of
Actuaries’ Contingencies magazine found that because of this provision,
“premiums for younger, healthier individuals could increase by more than 40
percent.” Young men will pay even more than young women.

A former director of the Congressional Budget Office, Douglas Holtz-Eakin,
conducted a survey that showed fewer than half of young people will sign up for
insurance if premiums rise by 30 percent.
Young people also face a daunting approval process in applying for coverage.
Applicants must divulge their income, family status and information about their
employers, details on any insurance offered at work and their health habits —
just to find out if they are eligible for subsidies.
Ezekiel Emanuel, a key architect of the president’s health plan, says he is
worried that young people will be “bewildered,” and they may “forgo purchasing
health insurance and opt to pay a penalty instead.”

That certainly will be an attractive option for many since the penalty starts
at just $95 the first year.
And there is yet another disincentive for young people to enroll in coverage:
They can wait to sign up for coverage until after they get sick or injured. The
law requires health insurance companies to sell insurance to anyone who
applies. But if young people don’t sign up, the insurance pools are likely to be
composed primarily of people who have high health costs. This could cause a
“death spiral” where many more older — and sicker — people are enrolled, causing
health insurance premiums to rise to cover their medical costs, thereby driving
even more young people out of the market.

The White House believes that it will be able to persuade young people, who
overwhelmingly supported the president, to enroll out of loyalty. “The president connects with young people, too, so he needs to use that bond
and get out there to convince them to sign up for health insurance to help this
central part of his legacy,” said Emanuel, a health care expert at the
University of Pennsylvania.
But young people may find that zeal may be severely tested when it comes down
to paying thousands of dollars for health insurance that they may not want or
need.

Consider, for example, a 27-year-old earning about $34,000 a year. He now
could buy health insurance for about $200 a month. However, the new rules and
more generous benefits required under the health law mean he would have to pay
about $300 a month instead. He could get a subsidy of about $20 a month but,
even with that, he still would be paying nearly $1,000 a year more for health
insurance than without the law.

The White House is expected to mount a massive advertising campaign this
summer to encourage people to enroll. This will severely test his young supporters, who are having the hardest time
finding jobs in our economy. Forcing them to also purchase health insurance —
and pay more for it — may cool their enthusiasm to help the president fulfill
his legacy.